Ongoing market rout is just plunging opportunities out for you. (Malaysia FBMKLCI update)

ROUT

(Price Correction)

correction is a reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index to adjust for an overvaluation. Corrections are generally temporary price declines interrupting an uptrend in the market or an asset.

(Uptrend)

DEFINITION of ‘Uptrend‘ Describes the price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend.

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Where is FBMKLCI standing now?

We will be doing a daily update on the FBMKLCI as the current rout in the global market are just getting interesting!

(From yesterday post)

The FBMKLCI:

  • Retracing into a correction from 1,880pts high.
  • Playing into the ‘sandwich box’ of 1,841pts range to 1,816pts SHALL 1,841pts support is broken down.
  • A rebound from the 1,841pts support will bring the index to test it’s historical high of 1,896pts.
  • A violation on the 1,841pts support will put the FBMKLCI into the ‘sandwich box’ trading at the range of 1,841-1,816pts.
  • As long as the FBMKLCI did not fall out of it’s ‘sandwich box’the bull run resumes. 

2018Feb-FBMKLCI-1000x600

Where does the FBMKLCI stands now?

  • Fallen into the “sandwich box” of 1,841-1,812 (Correction from previous 1,816. Actual support stands at 1,812) 
  • As the U.S market starts to go for recovery, the FBMKLCI will be seen playing withing the range of 1,812 – 1,841 following a market recovery.
  • In the short to medium term it will be great for the index not to drop down from its “sandwich box” again as that will weaken the market further.
  • Index rally can only be seen once it is trading out of its box of 1,841pts.

As the broad market stocks have fallen into a correction mode for almost 2 weeks, they are mostly oversold. Looking into bargain buy looks lucrative now. As always, avoid downtrend stock and you will do well in Year 2018! (Read back previous post on how to differentiate an uptrend vs downtrend)

(An example from yesterday post and today’s update)

2018Feb-DNEX-1000x600

Whether you are looking to buy and hold or trade for market recovery in the short term, always know where the downside risk are. Manage your stop loss well.

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